When UC started in April 2013, the IT system used was developed by private contractors. Following a programme ‘reset’, DWP decided to build their own digital IT system that would run alongside the existing system. Areas using the original system are known as ‘live service areas’.

All UC areas will be live service areas unless they are a designated full service area. Live service areas continued to roll-out until April 2016 in order to test and learn processes and policy. From May 2016, live service areas have gradually become full service areas and all existing live service claimants are being transferred to the full service system. In order to implement the changes to UC announced in the Autumn Budget 2017, the Government have announced that no new live service claims will be possible from 1 January 2018. This means that some areas will no longer have any UC service for new claimants and instead they will need to claim legacy benefits. We explain this change in more detail below.

It is important to understand whether an area is a live service area or full service area because the main UC rules are different between the two. In addition, some areas that are currently live service will be changed to full service at some point in the future and advisers will need to understand the process for transferring between the two systems. You can use our tool www.universalcreditinfo.net to find out the position for any postcode area.

Who can claim in live service areas?

Only claimants who meet the ‘gateway conditions’ in place for that area are eligible to make a claim for UC. If the person meets the gateway conditions and lives in a postcode that is accepting UC claims, then they are able to submit a claim. However, the gateway conditions should not be confused with the entitlement conditions of UC. Even if a person meets the gateway conditions, it does not mean they will necessarily be entitled to UC. We explain the main entitlement conditions for UC in our Universal Credit section.

Gateway conditions were introduced from 16 June 2014 (prior to that date pathfinder conditions applied). However, they have changed a number of times since that date. To add further complexity, the gateway conditions vary from postcode to postcode.

In the majority of live service areas, claims can only be made by single, childless jobseekers who meet other strict conditions. However, in some live service areas, claims can be made by couples and families with children who meet other strict conditions.

From 6 April 2017 to 31 January 2019 (previously 31 October 2018), claimants who are responsible for three or more children will not be able to make a claim for UC unless they:

Have claimed UC in the previous 6 months and are able to make a re-claim for UC; or

Are a single person and were claiming UC with someone else as part of a couple and that claim ended in the last month

For this purpose ‘reclaim’ means a claim that is made by a single person or members of a couple jointly and the claimant (or either joint claimant) meets the following conditions:

The claimant was previously entitled to an award of universal credit the last day of which fell within the 6 months preceding the date on which the claim is made; and

During that 6 months:

The claimant has continued to meet the basic conditions required for universal credit (disregarding the requirement to have accepted a claimant commitment and any temporary period of absence from Great Britain that would have been disregarded during a period of entitlement to universal credit); and

The claimant was not excluded from entitlement to universal credit due to restrictions (for example due to being a member of a religious order who is fully maintained by their order, is a prisoner or serving a sentence of imprisonment detained in hospital unless certain exceptions apply).

Claimants responsible for three or more children who cannot make a UC claim can claim tax credits and other legacy benefits instead until 31 January 2019. After that date it is expected that these claimants will be able to claim UC, although the Secretary of State has the power to extend this period

As with the full service areas, there is a general power that states the Secretary of State may determine not to accept any particular claims for UC temporarily in order to safeguard the efficient administration of UC or ensure the effective testing of systems for the administration of UC.

Changes to live service from 1 January 2018

From 1 January 2018, the UC live service stopped taking brand new claims. This change was announced following the Autumn Budget 2017. No legislative change is needed to implement this closure of the live service because a determination has been made under Regulation 4 Universal Credit (Transitional Provisions) Regulations 2014. This power allows the Secretary of State to decide not to accept any particular claims of UC in order to safeguard the efficient administration of UC or to ensure the effective testing of systems for the administration of UC.

Currently, all postcodes in Great Britain have some UC service for new claimants - some postcodes have live service and others have full service. However, from 1 January 2018, some areas have returned to a status of having no UC service for new claimants. Instead, claimants who would have met the gateway conditions for live service must claim legacy benefits (tax credits, income-based Jobseeker's Allowance, income-related employment and support allowance, housing benefit and income support). This will remain in place until that postcode area becomes part of the full UC service.

Existing UC live service claimants will not be affected by the change and will continue their UC claims.

Other people who will not be affected by the change include:

Those transitioning to full service - this means that where a postcode area that has been part of the live service becomes a full service area, existing live service claimants will need to make a new claim to the full service soon after.

Those who change address - according to a DWP memo, this will be classed as a change of circumstances within universal credit.

Those who join an existing universal credit claim - where a person forms a couple with an existing live service claimant, the couple will continue their claim to universal credit.

Those who separate from their partner - where a couple are claiming UC under the live service and they separate, both claimants will remain on UC as single claimants (if appropriate).

Where someone has received universal credit in a live service area which ended because their earnings increased, their claim stays open for up to 6 months. If their earnings fall in that 6 month period, they should be awarded UC again without the need for a new claim. As no claim is required by the legislation, they are not affected by the 1 January 2018 change.

This change opens up the possibility of people withdrawing/terminating existing live service claims and returning to legacy benefits through choice. Advice should be sought from a welfare rights specialist for anyone considering this. This is not possible in full service UC areas.

Claims made after 1 January 2018 for UC cannot be backdated to before that date. Any backdating will need to be dealt with by the relevant legacy benefit.

Current gateway conditions

If a claimant lives in relevant districts No.1 to No.28, then the gateway conditions in this document will apply at the date of claim. These districts accept claims from couples and families with children (subject to some exceptions).

From 6 April 2017 to 31 January 2019, claimants who are responsible for three or more children will not be able to make a claim for UC unless they:

Have claimed UC in the previous 6 months and are able to make a re-claim for UC; or

Are a single person and were claiming UC with someone else as part of a couple and that claim ended in the last month

For this purpose ‘reclaim’ means a claim that is made by a single person or members of a couple jointly and the claimant (or either joint claimant) meets the following conditions:

The claimant was previously entitled to an award of universal credit the last day of which fell within the 6 months preceding the date on which the claim is made; and

During that 6 months:

The claimant has continued to meet the basic conditions required for universal credit (disregarding the requirement to have accepted a claimant commitment and any temporary period of absence from Great Britain that would have been disregarded during a period of entitlement to universal credit); and

The claimant was not excluded from entitlement to universal credit due to restrictions (for example due to being a member of a religious order who is fully maintained by their order, is a prisoner or serving a sentence of imprisonment detained in hospital unless certain exceptions apply).

Claimants responsible for three or more children who cannot make a UC claim can claim tax credits and other legacy benefits instead until 31 October 2018. After that date it is expected that these claimants will be able to claim UC, although the Secretary of State has the power to extend this period

The date of claim for UC is normally the date it is received or if later, the first day for which the claim is made. Where a couple is treated as having made a claim for UC, the date on which the claim is treated as having been made is the date they form the couple. More information can be found in DWP ADM Chapter A2.

You can read more detail about the gateway conditions in ADM Chapter M3.

Claims for UC based on incorrect information

Where a claimant gives incorrect information about living in one of the relevant districts or meeting the gateway conditions and this is not discovered until after a decision has been made and at least one payment is made then they will remain entitled to UC.

If this incorrect information is discovered before the award of UC is made, the claimant will be informed they are not entitled to UC. If they then make a claim for WTC or CTC within one month of being told they are not entitled to UC, their tax credit claim will be treated as made on the date that the claim for UC was made. Similar rules apply where an award of UC is made but no payment is made. In that case the UC claim ceases to have effect immediately.

Claims for tax credits in live service areas

If a person meets the gateway conditions in a live service area that is accepting UC claims, then they can claim UC until 1 January 2018.

Our understanding of the current rules is that there is an element of choice, so that if someone meets the gateway conditions but would rather claim tax credits then they can do so. There is nothing stopping HMRC from accepting a tax credit claim from someone living in a live service area who meets the gateway conditions. That same choice does not exist with all legacy benefits – for example where the gateway conditions are satisfied a claim for UC or Jobseekers Allowance or Employment and Support allowance results in the abolition of income-based JSA and income-related ESA for that claimant so they can’t be claimed instead of UC.

The general rule is that a claimant is not entitled to tax credits for any period where they are entitled to UC. The only exception to this is during the first assessment period for UC after two people become a couple and the tax credit award of the ‘new claimant partner’ terminates after the first date of entitlement to UC. This is because in such a case UC rules may treat the claim as made at an earlier date than the TC termination date.

Claimants who are classed as ‘UC claimants’ are also prohibited from claiming tax credits. This includes someone in a live service area whose award of UC comes to an end (for example due to an income rise) or who has a claim refused – for a period of 6 months after the end of the UC award. Find out more about UC claimants and tax credits.

Existing tax credit claimants in live service areas

Existing tax credit claimants are currently unaffected by the roll-out of UC. Their awards of tax credits will continue at present until DWP introduce rules to migrate those people across to UC. Existing claimants will only be affected if they either choose to move to UC or they have a change that ends their tax credit award:

Choosing to move to UC

There is nothing stopping a tax credits claimant from choosing to claim UC providing they meet the relevant gateway conditions and they are not barred from claiming UC (for example because they are responsible for three or more children). Entitlement to WTC or CTC is not listed as one of the restrictions in the gateway conditions.

Tax credit claimants will need to seek advice from a welfare rights specialist before deciding to make a claim to UC. Some people will be better off under UC than existing legacy benefits, but many people will be worse off financially and UC claimants are subject to conditionality rules that tax credits claimants are not.

However, as a general rule you cannot be entitled to tax credits and UC at the same time. The only exception to this is during the first assessment period for UC after two people become a couple and the tax credit award of the ‘new claimant partner’ terminates after the first date of entitlement to UC. This is because in such a case UC rules may treat the claim as made at an earlier date than the TC termination date.

In this situation, if a claim for UC is made (or is treated as having been made) and the person (or persons) meet the basic conditions for UC (except for the claimant commitment requirement) then the all awards of tax credits for which there is entitlement (on the date of the UC claim) will terminate on:

The date before the first date on which the claimant is entitled to UC in connection with the claim; or

If the claimant is not entitled to UC, on the day before the first date on which he or she would have been so entitled, if all of the basic and financial conditions applicable to the claimant had been met

This will be the case even if under Tax Credits legislation the award would terminate on a later day.

Although the legislation works in such a way as to bring a tax credits award to an end when a UC claim is made, and the process between DWP and HMRC is such that there should be notification to HMRC to end the tax credits claim, we would advise that claimants report the situation to HMRC in case the process breaks down.

Moving due to a change of circumstances

Where a tax credit claim ends because of a change of circumstances - for example, a couple separating or a single person forming a couple, or a WTC only claimant who loses their job - then if the gateway conditions are met the person can claim UC.

Where a single tax credit claimant (the new claimant partner for UC purposes) forms a couple with an existing UC claimant, the new claimant partner will have their tax credit award terminated for the current tax year on:

The day before the first date on which the joint claim for UC starts OR

If they are not entitled to UC, the day before the first date on which they would have been entitled if they had met all of the basic and financial conditions applicable to them.

Transferring from live service to digital service

When an area goes into the full service, DWP will start to write to existing live service claimants inviting them to make a claim through the digital full service system. If this is done within the timescale given, there should be no gap in payments and the person's assessment period should remain the same. It is not clear what happens if a person fails to make a claim using the full service system and whether this will result in termination of their live service award - we are seeking clarification from DWP on this point.